Transcript

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>> A startling new development about the hacking that took place last year at the Securities and Exchange Commission, and it was only revealed a day ago. Reuters learning exclusively Thursday, that the nation's top securities regulator had been warned, Reuters Washington reporter, Sarah Lynch.>> We are reporting today that the Homeland Security Department, when it did a scan of all the government agency's computers in January.

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They actually found that the SEC had five active critical vulnerabilities that were in the system, that had still not been patched. So I think this raises a lot of questions about whether the SEC waited too long to tell investors, and to tell Congress, and the American public.>> Wall Street struggling with the fact that the breach, which strikes at the heart of the US financial system, even happened at all.

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>> It is certainly ironic that the SEC has been hacked. I mean, they have been sounding the alarm bells for quite some time about firms on Wall Street to get up to speed, and make sure that they are not hacked. I think the investors are a bit spooked, it's not everyday that you have a situation like this.

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And so I think it has stoked some fears about the stableness, really, of the SEC's system.>> SEC chair Jay Clayton, who has vowed to make fighting cyber crime a top priority during his tenure, revealing the breach took place in 2016. But only discovered last month, that cyber criminals may have used that access to make illicit trades, how?

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By exploiting a computer glitch to gain access to non-public information on corporate disclosures, ranging from earning statements to mergers and acquisitions. This follows up a massive breach at US consumer credit reporting agency Equifax, impacting nearly half the American population. The SEC says it has already fixed the glitch, but that's not likely to soothe the wrath of lawmakers expected to grill the head of the SEC at a hearing next week.